Your Guide to the Income Tax Changes for 2025 and Beyond!

👋 Welcome to your life, fellow Americans!
It’s now 2026, which means it’s time to get you up to speed on all those little tweaks and turns in this crazy little thing called income taxes.

✅ Good News First

Thanks to the One Big Beautiful Bill Act (OBBBA), signed into law in July 2025:

• Many of the 2017 TCJA tax cuts are now permanent (lower rates, higher standard deduction).

• 100% bonus depreciation and R&D expensing are locked in permanently.

• The Child Tax Credit remains expanded, with simplified phaseouts.

• Certain “no tax on” exemptions were added (e.g., eliminating tax on some Social Security benefits for lower‑income retirees).

• Refunds are projected to be 18% higher in 2026 filings due to these changes.

Unlike past years, this year’s changes are relatively minimal—and some of the better benefits have officially become permanent. We’d all gotten used to the IRS taking longer and longer to release updated tax laws, but for once, both the IRS and states have been timely. That’s a win.

Shoutout to my early‑bird clients (yes, they exist, just in small numbers!) who are showing up earlier and earlier in January. I was starting to think January tax processing was a thing of the past.

⚠️ Year of Due Diligence

Tax fraud is still a hot issue. If you’re claiming EITC, CTC, ACTC, or AOC, expect to provide documentation. Refunds tied to these credits won’t be released until Feb. 15–27, 2026.

While it’s frustrating for honest taxpayers to wait, it’s better than having the IRS reject your return because some scammer already used your Social Security number.

📉 Personal Exemption

Still $0 for 2025 and beyond.

🧾 Standard Deductions

2025 amounts:

• Married Filing Jointly / Widow(er): $31,500

• Head of Household: $23,625

• Single / MFS: $15,750

• Dependent: $1,350

2026 update under OBBBA:

• Married Filing Jointly: $32,200

• Head of Household: $24,150

• Single / MFS: $16,100

👵 Senior Bonus Deduction (2025)

• Single 65+: $6,000 (phases out $75k–$175k)

• MFJ both 65+: $12,000 (phases out $150k–$250k)

• MFJ one 65+: $6,000 (same phaseout)

💰 Earned Income Credit (2025)

• 3+ kids: $7,830

• 2 kids: $6,960

• 1 kid: $4,213

• No kids: $632

🏥 State Mandates (2025)

CA, MA, NJ, RI, and DC still impose penalties; VT mandate has no penalty.

📚 Educator Deduction

Now permanent and indexed for inflation. For 2025: $300 ($600 MFJ if both teachers).

✈️ Passport Revocation

If you owe $62,000+ in delinquent tax debt, your passport may be revoked.

📈 Tax Brackets (2025)

Rates remain 10%–37%, adjusted for inflation.
OBBBA impact: These lower brackets are now permanent rather than expiring in 2026.

💼 Retirement Contributions (2025)

• IRA: $7,000

• SEP IRA: $70,000

• 401(k)/403(b): $23,500

🧾 Alternative Minimum Tax (2025)

• Single/HOH: $88,100

• MFJ: $137,000

• MFS: $68,500

📅 2025 Filing Deadlines (for 2026)

• Jan 31: W‑2s/1099s due

• Mar 16: S‑Corp/Partnership returns

• Apr 15: Personal, C‑Corp, single‑member LLC

• Sep 15: Extended entity returns

• Oct 15: Extended personal returns;

• For most households, 2026 filings will look more generous than expected.

Be prepared to show the tax preparer your license or ID cards, social security cards, medical records, school records, utility bills, grocery bills, landlord statements, placement agency statements, bank statements/ledgers, receipts, last year’s adjusted gross income, your kindergarten diploma, whatever you can get your hands on to prove your claims. There is no such thing as bringing in too much documentation. The IRS demands it.

The maximum amount of Earned Income Credit for Tax Year 2025 is:

• $7,830 with three or more qualifying children

• $6,960 with two qualifying children

• $4,213 with one qualifying child

• $632 with no qualifying children

If you live in a state with a health insurance individual mandate, you may face a state-level penalty when you file your 2025 state tax return.

• California: For the 2025 tax year, the penalty is the greater of a flat amount ($900 per adult and $450 per dependent child) or 2.5% of household income.

• Massachusetts: Uses a sliding scale based on age, income, and family size, with penalties capped at half the cost of the lowest-priced ConnectorCare plan.

• New Jersey: The penalty is calculated as a flat amount or a percentage of income, whichever is higher.

• Rhode Island: Uses a similar approach to New Jersey and the old federal formula, with a flat penalty amount or 2.5% of household income.

• Washington D.C.: The penalty is calculated as the greater of a flat amount ($745 per adult and $372.50 per child) or 2.5% of income above the filing threshold.

• Vermont: Has a mandate but currently does not impose a financial penalty.

📚 Teacher, teacher, can you teach me?
Yeah, we remember that song too… unfortunately. But here’s something worth remembering:
The $300 above-the-line deduction for classroom expenses is now permanently enshrined in the tax code—and it’s even indexed for inflation!
📝 For 2025, eligible educators can deduct up to $300 (or $600 if both spouses are teachers and filing jointly).
You earn it—chalk it up to the job!

✈️ We gotta get outta this place!
Thinking of traveling abroad? Well, make sure Uncle Sam isn’t waiting at the gate.
If you owe the IRS more than $62,000 in seriously delinquent tax debt (2025 threshold), your passport may be revoked or denied.
Yeah—tax debt could keep you grounded.

🚪 Somebody’s knocking at the door, somebody’s ringing the bell…
And it might be someone collecting for the IRS.
Starting in recent years—and continuing in 2025—the IRS is actively using private debt collection agencies to pursue some unpaid tax debts.
Tip: They can’t threaten or arrest you, but they can call. If you get a letter first, it’s probably legit. If not? 🚩 Red flag. Stay smart.

📈 Tax Brackets, anyone?
You want ‘em? The IRS has ‘em. Freshly adjusted for inflation in 2025, and as always—buried in a mountain of fine print.
(But don’t worry, we already pulled the numbers for you — just scroll up! 💼)

Single

Your Traditional or Roth IRA contribution now maxes out at $7,000, your SEP IRA contribution tops out at $70,000, and your 401(k), 403(b), and other elective deferral qualified retirement plan contributions are capped at $23,500.

The beast known as the Alternative Minimum Tax has increased its exemption amounts to;

• $88,100 for single or Head of Household filers

• $137,000 for married filing jointly

• $68,500 for married filing separately

The deadlines are a changing, the deadlines are a changing!

Y’all ready for this? Strap in!

📅 2025 Tax Year Filing Deadlines (for the 2026 calendar year):

✅ January 31, 2026
That’s the deadline to get your 1099s and W-2s out to your peeps, and 1096s and W-3s to the IRS. Employers used to drag their feet, but now the IRS brings the heat if they miss the deadline.

✅ March 16, 2026 (because March 15 falls on a Sunday)
This is your deadline to file S Corporation and Partnership returns or request an extension. Don’t push it—late filing penalties are no joke.

✅ April 15, 2026
That’s when your personal tax return, single-member LLC, and C Corporation returns are due—or at least your extension request. No mercy if you miss it: penalties are real, and they hurt.

✅ September 15, 2026
This is the extension deadline for entities like S Corps, Partnerships, multi-member LLCs, and calendar-year C Corps. Clock’s ticking—get it done.

✅ October 15, 2026
The final deadline to file your personal tax return if you got an extension. Whew—you made it. You probably asked your tax pro if there was another extension… there’s not. Hit send.

Now enjoy the holidays…

Happy Tax Season Charlie Brown